UKGov is selling the Green Investment Bank to a Vampire Kangaroo!
One area where Scotland is outperforming the UK is in the generation of renewable energy.
The climate change impact of generating a unit of electricity in Scotland is 196g of CO2 per kWH. This is less than half of the 400g of CO2 per kWH produced in the rest of the UK. This has meant a boost for the Scottish economy, not least because Scottish expertise with regards to renewable energy is in demand across the globe.
The growth in the renewable sector in Scotland came as a result of support by both Scottish and UK governments. However, since the Conservatives majority government was elected in 2015, they have been decreasing support for Green policies.
Subsides for onshore generation and solar power have been scrapped. The Green Homes Scheme has been scrapped. Incentives to buy a greener car have been watered down. A plan to make all new homes zero carbon has been scrapped.
While ways of generating dirty energy like fracking have been openly encouraged.
However, perhaps most worryingly of all is the current plan to sell off the Green Investment Bank. The obvious reason this is a bad idea is to be found on the government’s own description of the purpose of the bank.
Private markets would rather invest in stuff they find less risky.
It makes more sense for something like this to be owned by the government as the government also benefit from the social, environmental, tax and skills impact such investment brings. The kind of stuff private companies don’t care about as they are only interested in short term profit. Just like in the case of the scrapped policies listed above, initiatives like the Green Investment Bank are important as it is the government who have to pick up the cost of the damage to the environment caused by the burning of fossil fuels.
The Green Investment Bank currently makes a profit but even if it didn’t the cost of not moving to fossil fuels would, in the long term, dwarf any losses.
The government obviously knew this sale was controversial as, when they originally floated the idea of selling off the bank, they pretended they were going to keep a significant stake in it. A promise they have now rescinded.
What makes matters worse is that it has recently been announced that the preferred bidder is Macquarie, an Austrailan bank with a dodgy history. It has acquired the nickname ‘Vampire Kangaroo’ by scooping up UK assets, stripping them of value, avoiding as much tax as possible and selling the assets on for a massive profit. Which is exactly what they did when they owned Thames Water as reported by This Is Money.
Macquarie – known as the Vampire Kangaroo for its ruthless focus on profits – and fellow investors have extracted around £1.2billion of profits from Thames since taking control a decade ago. And the bank has aggressively focused on limiting its tax payments, with Thames paying just £100,000 in corporation tax since 2006……….It loaded the water supplier with loans, increasing the amount of debt for investments on its balance sheet from £1.6billion ten years ago to around £10billion. Its pension deficit has ballooned from £38m to £250m.
They were even rejected as a suitable buyer of the London Stock Exchange due to their unethical behaviour. If they are deemed too unethical for a hub of capitalism they are hardly prime candidates for owning what should be a national strategic resource.
It is hard to envision a scenario where selling to Macquarie will not result in fewer good value investments in renewable energy. This will be damaging to one of the success stories in the current Scottish economy. Some nationalists have suggested this is part of a Tory strategy to keep Scotland down and thus fend off the drive toward independence. I am not that much of a conspiracy theorist, the reason is probably more to do with ideology.
The conservatives think that everything is better off in private hands and they don’t take climate change as seriously as scientists tell them it is. Whatever the reasoning, this will certainly have a negative effect on the renewable industry which will have a disproportionate effect in Scotland.
If you doubt that Tory policy is having a negative impact, then I’ll leave you with a report from this week predicting that renewable investment is set to drop by 95 percent this year.